30% ruling changes

30% ruling in the Netherlands shortens to 5 years in 2019

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The Dutch government announced that they are making big changes to the 30% ruling, shortening the time limit from eight years to five. What does it mean for the expat community in the Netherlands?

On 24 April 2018, the Dutch government gave the final details of its plan to modify the 30% ruling, announced in October 2017. The duration of the 30% tax exemption offered to highly skilled migrants to the Netherlands is suddenly reduced to five years from the original eight years, effective as early as 1 January 2019. As the news of the new 30% ruling sets the Dutch expat community afire, many foreign residents have questions. Lennart Suurmond, tax consultant with J.C. Suurmond & zn, provides some answers. 

What are the changes to the 30% ruling?

Introduced on 10 October 2017, the “Confidence in the Future” document drafted by the Dutch government announced plans to shorten the 30% ruling from eight years to five years. On 24 April 2018, that plan was confirmed and a date set for the beginning of the new rule: 1 January 2019.

Who does the new 30% ruling affect?

Expats who benefit from the 30% ruling are usually highly skilled migrants who were hired by Netherlands-based companies from abroad. The exemption is considered a compensation for the costs of relocation to the Netherlands 

The new duration of the 30% ruling will not only affect all new applicants, but will also be applied retroactively to the expats who are already benefiting from the tax advantage.

In brief,

  • If you have been subject to the 30% ruling for more than five years already, you will lose this tax advantage as of 1 January 2019, whether you benefited from the eight-year exemption or the 10-year exemption (the latter in the case of expats who started receiving it before 1 January 2012).
  • If you are still within the first five years of your 30% tax ruling, you will stop benefiting from the tax exemption as soon as you hit the five-year mark.
  • If you have been hired or are in the process of being hired by a Dutch company and have been informed that you will benefit from the 30% ruling, you will receive it for five years.   

What happens if I am changing jobs?

Expats who are moving to a new position or a new employer will still be able to receive the 30% ruling, as long as they are still within five years of their original application to the exemption. As for everyone else, they will stop benefiting from the 30% ruling as soon as they hit the five-year mark.

Mitigating factors of the new 30% ruling

Research conducted by Dialogic in 2015 shows that almost 80% of the expats benefiting from the 30% ruling only use it for five years or fewer. Fewer than 10% of the foreign employees actually use the full term of the scheme. All in all, it means that of the approximate 60,000 expats currently subject to the 30% ruling, only about 10,000-12,000 will be affected by the new duration of the 30% ruling.

What can I do about my new 30% ruling situation?

Expats who have planned their financial future according to the original eight-year duration of the 30% ruling – including investing, buying property, or even having children – may have to reevaluate their projects. It would be a good idea to speak to a financial advisor to get a better picture of what this means for you if you are affected. In the meantime, there is also a petition by Screwed Expats to the Dutch Ministry of Finance on change.org.

Lennart Suurmond completed several fiscal studies and joined J.C. Suurmond Tax consultants in 2003. J.C. Suurmond was established in 1986 by his father and the company’s focus has always been on service and results. Tax advice, tax returns, international income and assets, advice re immigration are the main fields where Lennart has experience.




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